Gangsters and Strippers and Liquor Law: The Story of Famous Flesh Gordon’s

Alcohol & Advocacy has previously considered what it means to be a fit and proper person for the purpose of holding a liquor licence in British Columbia: the criteria are broad and the discretion is great. Many of the criteria relate to an assessment of what the licence applicant has actually done, such as having a criminal record or committing violations of the Liquor Control and Licensing Act. But what about the less objective criteria – such as being “of good reputation and character” or being “associated” with people involved in criminal activities? How do regulators interpret those requirements?

After a lengthy court process, including a failed attempt at leave to the Supreme Court of Canada, on November 26, 2014 the Ontario Court of Justice released its reasons in Famous Flesh Gordon’s v. Alcohol and Gaming Commission. The Flesh Gordon’s decision, albeit under Ontario’s Liquor Licence Act, addressed the question of whether a liquor licensee who has no criminal record, can have their licence revoked on the basis of bad character.

Famous Flesh Gordon’s was a strip club in London, Ontario. The licensee, Robert Barletta, was a long-time member, and former local president, of the Hells Angels. After a separate court ruling found the Hells Angels to be a criminal organization (a defined term in the Criminal Code) , Ontario’s Registrar of the Alcohol and Gaming Commission applied to revoke Mr. Barletta’s liquor licence on the basis of his affiliation with the Hells Angels.

Initially the Board of the Alcohol and Gaming Commission refused the Registrar’s revocation request. The Registrar appealed that decision, and lost, and it was forced to appeal again to Ontario’s highest appellate court to get an order that that Board re-hear the revocation application. On the Registrar’s second attempt at revocation it was successful, only to have Mr. Barletta appeal that decision. Clearly this was a hotly contested and legally complex dispute.

So why all the appeals? What makes the Flesh Gordon’s case interesting is that Mr. Barletta did not have a criminal record or history of liquor licence infractions – not a single one. Moreover no evidence of any illegal activity at Famous Flesh Gordon’s was presented by the Registrar at either hearing held during the revocation process.

Though the Registrar could not point to any actual evidence of criminal wrongdoing, or failure by Mr. Barletta to carry on his business with “integrity and honesty”, as is required by the Liquor Licence Act, the uncontested evidence was that Mr. Barletta had been a “full patch” member of the Hells Angels since 2002. The Registrar’s evidence was that the Hells Angels are a criminal organization dedicated to the facilitation or commission of serious criminal offences, and that as a full patch member Mr. Barletta was required to be devoted to those causes and maintain a network of criminal contacts.

In Famous Flesh Gordon’s the Superior Court of Justice, Divisional Court dismissed Mr. Barletta’s appeal, and confirmed the revocation of his licence. The Court found that the relevant section of the Liquor Licence Act required more than simply owning an establishment where no criminal activity takes place: it requires that the licensee be someone who can reasonably be expected to carry on the business in accordance with the law, integrity and honesty. As a member of the Hells Angels, Mr. Barletta did not meet this description. Mr. Barletta’s submissions that “conditions” such as installing video cameras in the premises, and a prohibition against “gang colours” would mitigate the Board’s concerns, but the Court was not swayed.

Ontario’s director of legal services for the Alcohol and Gaming Commission has called the Flesh Gordon’s decision precedent setting for other provincial regulators. Licensees in British Columbia should take notice of the Flesh Gordon’s decision as it confirms that regulators are entitled to take a broad view of what it means to be a fit and proper person, and are not restricted to actual evidence of infractions or illegality to revoke a liquor licence.

If you have questions or concerns about the status of your liquor licence contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Dan Coles
Retired bartender. Young lawyer. From the East, living in the West. Interested in British Columbia's producers and purveyors of wine, beer and spirits.